Cyclic nucleotides, especially cyclic GMP, appear to be important in retina and pigment epithelium. This is true both in adult and embryonic tissue. Guanylate cyclase, the enzyme that catalyzes the formation of cyclic GMP, is in extremely high concentration in the neural retina and has several unique properties. Phosphodiesterase, the enzyme that metabolizes cyclic GMP, demonstrates very low activity in retinas from dogs with retinal degeneration, leading us to postulate that resultant abnormally high cyclic GMP concentrations are probably intimately involved in the disease process.